Fannie Mae announced the new down down payment requirements under their ‘Keys to Recovery‘ initiative. Hopefully this will help stabilize the market but it only applies to single family homes as primary residences. What about the deteriorating condo market. Is there an end in sight?
As many of you have read in the past, most of the statistics available show the DC Metro area as one of the growth leaders for the upcoming year. From home values increasing 4% between July ’06 to July ’07, condo market maintaining sales and over 50,000 jobs coming to the region over the next 14 months, there is no cause for the local market to shutter the way much of the rest of the country has done over the past 12 months. On top of that, I am expecting the Fed to reduce interest rates another .25% today, thereby enticing purchasers to jump on the bandwagon. What I will say is I have noticed a slowdown in the market, back to what I hear it was like before the real estate boom, homes sitting for longer, and investors pulling out unless margins significantly in their favor.
With that in mind, these next 3 months may be the best time to purchase. I am expecting a strong spring market, at least stronger than what we have right now and declining inventory on the market. If we look at the following chart I created this morning, based solely from the stats available on MLS, we can see that historically October and January have the lowest number of sales.
(CLICK THE IMAGE FOR CLEARER RESOLUTION)
Taking the month of settlement into account and, generally speaking, the settlement day occurring 45 days after ratification, or contract acceptance by both parties, it would be logical to assume that buyers will have the most leverage in September and December and the least in February. Compare this to the rule of thumb when negotiating on a car….always negotiate the last 5 days of the month…it may be the perfect time to buy.
This past week a great friend of mine & I decided its about time someone committed to reopening that HUGE retail space right underneath Dupont Circle. For those of you who have no idea what I’m referring to, there is 28,000 sq ft of retail space right underneath the Dupont Circle streets, extending from the building foundations at the outer edge of the circle to the fountain in the middle, of which two halves are split by the Connecticut Ave underpass. Next time you are in the area take a look at the 7-8 stair cases boarded up by green boards that somewhat resemble metro entrances, located at nearly every corner of intersecting streets at the circle. As a point of reference, there is one located right next to CVS.
…back to the opening of Down Under…
About 11 years ago two city inspectors shut down the retail space due to health violations and several illegal practices taking place by the vendors in the space and it has been shut ever since. Those inspectors were the head of zoning, Vincent Ford, and former code inspector Jim Delgado. As an advocate for the development and improvements for the city, I have decided to commit to the reopening of the space under Dupont myself…which got me thinking…who better to enlist to help reopen the area than the two gentlemen that shut the area down. Nobody knows the violations of Dupont better then Delgado and Ford. Its simply impossible. I called Delgado this past week and he’s in! I’m not sure how far we will get but what I can say is that if anyone is going to reopen Down Under, its going to be us.
For more info on the space, read a previous blog of mine HERE.
What we do not know is what would be the best use of space. Have ideas? Post your comments below.
As many of you may have been reading throughout the media world, most of the country is up in a panic regarding the mortgage industry and real estate price fallout. In most places across the country, with the exception of what I would consider the larger 12 cities, this panic may have justification, just not here.
This afternoon the Washington Business Journal released a report stating that home prices in DC are up 4% last month vs July of ’06. Crazy you say? Not really consider the upcoming development that we all are looking forward to in addition to the political turnover we are about to undergo. According to the WBJ, DC’s average sale price in July ’07 was $431,000, up $16,000 over last July’s average sale price at $415,000.
I’d like to stop there an and analyze exactly whats going on in this city. I believe we all could reasonably say that this past year was one of the worst years in real estate in the past seven years, right? Well, despite the media hype (having nothing better to write about), the mortgage subprime fallout, the price of gasoline increasing nearly 35 cents a gallon and our country spending $80 billion on the war, DC still had gains of 4% in 12 months. Hows that for financial security?
With all that going on why wouldn’t you purchase, especially with the upcoming anticipation of a strong spring market of ’08 and continued growth and investment by the government in local development.
The article can be viewed here.
This morning Ben Casselman, from RealEstateJournal.com, a guide for real estate developed by the Wall Street Journal, announced that Sotheby’s International Realty will be expanding their vision by representing affordable housing. To put it a bit more succinctly, they’ll be selling double-wide trailers in California. As many of you may well know, Sotheby’s is traditionally known for their niche in the upper echelons of property pricing and estates including many at the waterfront. So why the change? If you read my post on my predictions on the strongest growth market segment here, which happens to be affordable housing, a term I use for homes under $300,000, you might understand why Sotheby’s is headed in that direction.
According to Casselman, nearly 6% of homes represented by Sotheby’s on their site happens to be under $250,000, and that proportion is growing. The cause for Sotheby’s expansion of ammo happens to come as a result of an increasingly competitive ultra-pricey market segment nationwide. Many new brokerages are opening their doors to the uber-weathly and in my opinion, Sotheby’s had to take a new market position to maintain competitiveness.
Earlier Rockville Town Square announced that it will no longer be selling what remains of its 600 unit building and instead convert the remaining units to rental apartments. Due mainly to the over development of Montgomery County near Metro’s and the tightening of lender requirements.
A look at Rockville Condo Stats over the last 30 days:
Average Sales Price………………………………………..$399,000
Condos Under Contract:……………………………………….41
Average Days on Market Active Condos…………………83
Average Days on Market Condos Under Contract…….79
Average Days on Market For Settled Condos………….58
Average Dollar / SQ FT for Active Condos……………$328
Average Dollar / SQ FT for Settled Condos…………..$312
Alright, so lets analyze this data: If your selling a condo and its been on the market for 58 days or longer and you are not priced below $312 / sqft, its time to reduce or you may face holding that property upwards of one month longer at best before receiving an offer. In addition, we are approaching the winter market, an even more difficult time to sell so chances are prices will drop further and if you dont want to hold your condo through the winter it might be time to consider reducing.
This afternoon Forest Development Group and I signed a listing agreement for their new development at 2429 Ontario. The team and I are really excited about their new line of eco-friendly development catered towards the knowledgeable consumer. Our plan is to differentiate the product by building with not only comfort but with the environment in mind as well. Dwellings will have five single floor flats and two duplexes with private rooftop decks possibly complete with gardens and an active irrigation system that not only collects water to help the gardens on the roof but the common elements in front and behind the building. Pricing is going to start at around $550 per square foot and four deeded parking spots will be available for purchase.
The parties involved in the project are:
Developer: Forest Development Group
Project Management: Delgado & Associates
Graphic Design: Joe Velasquez
Printing: Dynamic Advertising Solutions
Sales & Advertising: Ken Taylor Real Estate & ME!
Construction Loan: Builders Bank
In House Lender: BB &amp;amp;amp;amp;amp; T
Title Work & Settlement: Paramount Title
Under the current zoning FDG plans on utilizing 2000 sq ft of the lot and a total construction area of 8000 sq ft. Its going to be a wonderful project. In my opinion the key to a successful introduction and overall sellable project will be differentiation between the effort FDG is placing on their construction vs the competition. In addition we are going to be working on developing a core brand for FDG and their upcoming line up of future development. Tomorrow I’m going to put up an area map and start uploading video news about the progress of the project and our competitive advantage over the rest of the market.
The address is zoned R5B, meaning the building has no side setbacks, no minimum lot sizes and no minimum lot width. Additionally it can be up to 50 feet tall with no limit on the number of stories but can occupy up to 60% of the lot itself.
Expected Release: Spring 2008
According to Brian Block (Brianblock.com) a local Virginia based Realtor with a similar blog site, research suggests that the local housing market will stabilize if not increase come years end. Brian’s thorough research seems to show that 53,200 new jobs were created throughout the DC Metro area in the year ending May, 2007, nearly 8,000 above the 15 year average of 45,000 per year. In addition, our unemployment rate is slightly lower than the national average of 3.1% at 2.9% locally and our rate is the second lowest in the nation.
What does all this mean? Strong job growth, low unemployment rates and a stabilizing housing market means a strong future for housing prices and growth. Unfortunately with the media portraying a crashing housing market around the rest of the country, nobody has taken the time to study our local market, which is in my opinion one of the strongest in the country, outside of New York, NY.
If you are considering waiting to purchase, consider your options now, especially with a recently reduced buyer pool due to sub-prime lender fallout.
I am starting a new series of posting on a monthly basis. Every month (from this month forward) will be a summary of the past as a review of the top sales across our city. The idea is to help keep you informed about whats moving, what stabilizing and where this city is headed. The posting is just a start of a new series of posts to help keep you updated.
At the top of the list is an incredible detached home in Kalorama at 2430 Wyoming Ave NW. Previously owned by a Mr. Robert Allbritton, former CEO to Riggs Bank which was first acquired by his father in 1981, the home was sold for a mere $4.7 Million. That price is pennies compared to the estimated net worth of Allbritton himself. Estimated at over $675 milloin. The home featured nearly 6100 interior square feet on a quarter-acre lot. What a beauty! With five bedrooms and four and a half baths, the home was built strictly for the entertainment of the rich and famous.
Second on this list (and a far second at that) is this mansion of a Georgetown home. As one of the largest homes available in Georgetown, this home was built to impress. This four bedroom, three-full and two-half bath home contains some of the largest living area in Georgetown at 4,000 sq ft. With an elevator and two car garage, living isn’t offered much easier than this. This home closed at a price of $2.75 Million and from what I can tell, may have been an investment property owned by one Cynthia B Helsabeck from Germantown. Something fishy? You decide!
Third on the list is an amazing Cleveland Park home. One of DC’s last one-acre plus homes, this palace is sure to maintain its value for generations to come. On top of the lot size is the homes 8,000 plus living area and nine bedrooms. This is as good as it gets. Formerly owned by Patricia Alsopo in Trust in addition to the family’s other home at 2949 Garfield Ter NW, both of these multi-million dollar homes are at the top of the list.
Fourth on the list is another Kalorama home and as usual, on Wyoming Ave NW. Located at 2212 Wyoming, this is on the row of the wealthy by most standards in DC. Prior to the sale, this property was owned by Benedikt Ibing, involved with Berlin Atlantic, a company involved with real estate, private equity and loan products. The home featured eight bedrooms, four and a half baths an sold for just under the $2.7 million mark. The buyers are not too far off themselves, having paid down nearly 60% of the purchase price in cash. At 5500 sq ft, this home is one of the finest row homes in Kalorama.
As far as opportunity goes, Amy Henderson has hit it. According to the tax record, Henderson (a historian at the National Portrait Gallery) purchased or transferred her $2.5 million dollar estate for $188k back in 2000. Thats a near 1300% gain over seven years. Near the growth of Google. Unfortunately no photo was attached in the listing, considering it was purchased the day it was listed there may not have been a need to! This home, located at 20 Kalorama Cir, in Kalorama as well, was sure to be an eye-catcher. It contains nearly 4800 sq ft of living space with four bedrooms and three and a half baths. Dont tell anyone but according to the listing it was a CASH SALE.
According to an article released this morning by money.cnn.com, the government is about go go on a hiring spree to compensate for not only an aging workforce but to protect from terrorism as well.
What does this mean, greater demand for local housing means greater market stability and security for you! According to the Partnership for Public Service, 83,000 jobs are being created to protect the US, including nearly 48,000 ad the Department of Homeland Security, 9,700 at the Treasury and nearly 36,000 at the Department of Defense. And we all know where the DoD is located, JUST ACROSS THE RIVER!!!
While these jobs aid in the local market there are additional openings across the U.S. including almost 63,000 security and law-enforcement openings and 28,000 border patrol agents.
Read more here.
This article was written by Anne Fisher.
This past weekend an unfortunate article was released from more sources than I can count, stating that Florida’s economy is about to undertake a frightening recession. According to Dean Foust of BusinessWeek online, construction and housing accounted for nearly 20% of all jobs over the past few years and now, as some states have been slipping into a housing slump with Florida as a front-runner, those jobs have now been lost.
Its difficult to assess where the market in Florida stands at this point. My entire family resides in Florida or New Jersey, both of which have undergone significant changes during the course of the last few years.
If you or anyone you know resides in a state having more difficulty than we are having in our area please let me know.
Mayor Adrian M. Fenty today announced Vision McMillan Partners will serve as the District’s development partner in redeveloping the 25-acre former McMillan Reservoir Sand Filtration Site at North Capitol Street and Michigan Avenue, NW. “We have an incredible asset in the McMillan site, but it’s been fenced-off for decades,” Fenty said. “It is time to put this land back into productive use and we’re partnering with a highly capable team that can do just that.” Vision McMillan was selected among five bidders by the National Capital Revitalization Corp., which is currently being folded into the District’s Office of the Deputy Mayor for Planning and Economic Development (DMPED). The team is led by EYA, a Washington-area developer who is currently leading the redevelopment of the 25-acre Hyattsville Arts District and the 30-acre National Park Seminary. Other members of the team include the Alexander Cos., a development firm nationally renowned for historic preservation projects; MacFarlane Partners, one of the largest African-American-owned real estate investors in the country; the Jair Lynch Cos.; StreetSense; Smoot Construction; and Urban Services Systems. “We are honored to be selected by the District for a project of this importance. EYA and our team members have a true passion for and deep expertise in completing challenging, urban projects”, said President of EYA Robert Youngentob. “We look forward to working with the District and the community to create a vibrant new neighborhood that respects the site’s history, furthers economic development, and enhances quality of life for District residents.” The McMillan site is expected to be redeveloped into a mixed-use project that could include residential, retail, office and park space, but there is no current development plan for the site. The project will include affordable housing and 35 percent of the local contracting opportunities must go to certified local, small and disadvantaged businesses (LSDBEs). More than half of all new jobs created must be offered to District residents and at least 20 percent of the equity used to finance the project must come from LSDBEs as well.
Mayor Adrian M. Fenty today announced Vision McMillan Partners will serve as the District’s development partner in redeveloping the 25-acre former McMillan Reservoir Sand Filtration Site at North Capitol Street and Michigan Avenue, NW.
“We have an incredible asset in the McMillan site, but it’s been fenced-off for decades,” Fenty said. “It is time to put this land back into productive use and we’re partnering with a highly capable team that can do just that.”
Vision McMillan was selected among five bidders by the National Capital Revitalization Corp., which is currently being folded into the District’s Office of the Deputy Mayor for Planning and Economic Development (DMPED). The team is led by EYA, a Washington-area developer who is currently leading the redevelopment of the 25-acre Hyattsville Arts District and the 30-acre National Park Seminary. Other members of the team include the Alexander Cos., a development firm nationally renowned for historic preservation projects; MacFarlane Partners, one of the largest African-American-owned real estate investors in the country; the Jair Lynch Cos.; StreetSense; Smoot Construction; and Urban Services Systems.
“We are honored to be selected by the District for a project of this importance. EYA and our team members have a true passion for and deep expertise in completing challenging, urban projects”, said President of EYA Robert Youngentob. “We look forward to working with the District and the community to create a vibrant new neighborhood that respects the site’s history, furthers economic development, and enhances quality of life for District residents.”
The McMillan site is expected to be redeveloped into a mixed-use project that could include residential, retail, office and park space, but there is no current development plan for the site. The project will include affordable housing and 35 percent of the local contracting opportunities must go to certified local, small and disadvantaged businesses (LSDBEs). More than half of all new jobs created must be offered to District residents and at least 20 percent of the equity used to finance the project must come from LSDBEs as well.
Several months ago I was speaking to a client of mine about where I was intending to purchase in DC and I mentioned that I would most likely be purchasing in the area between Florida Ave NE and H St NE, East of Union Station. Wouldn’t you know what DC released this past week. Marriott is building a hotel right on top of the train at Union Station.
According to DCMPED, the developer, Finvarb Group, based out of Florida, broke ground this past Friday on their new site for 218 rooms. The hotel is based in the NoMa area.
As a part of the development agreement negotiated by the District, 35 percent of the construction contracting must be done by businesses certified by the District’s Local, Small and Disadvantaged Business Enterprise (LSDBE) program and 51 percent of the new jobs must go to District residents. Additionally, the project financing includes a 20 percent equity stake from LSDBE investors.
The hotel will also be the first in the District’s emerging NoMA neighborhood, which lies between Union Station, the Florida Avenue Market, Eckington, Bloomingdale and Northwest One. The NoMA area is expected to produce more than 20 million square feet of new development, $500 million in new tax revenue and 36,000 jobs during the next 10 years.
Correct me if I’m misconstruing my perception of the market (which has been rather accurate so far), but with real estate as prime as what is available here, in DC, how can one consider purchasing a condo without parking???? Obviously depending on the buyers needs one may not need parking but take a look around. Seriously! This city is only becoming more dense, real estate is only going up, both literally and figuratively, and parking is going to be a strong selling point within 3-5 years if it already hasn’t affected buyers.
According to my research, deeded parking can go for as high as $75,000 as I experienced with a buyer looking in the Beekman Place community off of 16th St. Talk about prime real estate. According to DC law a legally deedable parking spot must be 9ft x 18ft. At a total of 162 sq ft, thats nearly $463 /sq ft. Condos in the same community are currently selling for $528 /sqft. Could it be a good investment? You tell me! (On Adams Mill there is a 124 sq ft spot selling for $75,000….$605 /sqft. PPPHHHHHEEEEEEW, thats as much as a luxury condo by BrookRose Development!)
Trouble you may ask? Actually no. Tomas Guirola put in his 30 days of KTRE to open our newest development division of KTRE as the leading developer sales and marketing firm of the area. Whats spectacular in our ability is our complementary traits in the business. He is dedicated, focused and has incredible writing skills and sales skills and I have been brokering, establishing and closing development contracts since my first day in the business. All I have to say is WATCH OUT!
Many would argue against it but I say Yay…it is. Thanks to sellers Darcy & Jake, basically an entire square block in SE DC has been purchased and subdivided into one large lot. My vision for the property would be 60 town homes similar to that of Dakota Crossing and 20 more town homes, each of which is four levels, containing two duplex condos, which would allow for your affordable housing quota. I have already run the numbers and the pro-forma is ready to be shipped. Our friends downtown say the waiver is possible…what do you think? Margins are in the 30%’s
For a copy of the pro-forma please email me at email@example.com.
Thank god we just ratified an offer on a home in Arlington….but whats with the market over there (in VA). We wrote five full price offers on single family homes between $600,000 and $700,000 and were outbid on each of the first four within seven days of its first listing. What seems more akward is that I am seeing the same results for signle family homes in Bethesda. Kind of wierd. If you are out there and can explain this anomoly please comment!
With all of the developer based or developer catered companies on the market and with such strong exposure to the consumer population by some other companies, you might be asking yourself ‘Why KTRE?’ Despite a somewhat limited time in the industry, I have prided myself on my ability to learn and adapt as quickly as possible to current market conditions and competition on the market. This has allowed my to strive successfully in an ever more competitive market especially with all of the blossoming companies on the market.
My impressions based on client feedback and corporate interaction!
Strengths: Great company, wonderful brokers and the right core branding strategy with extremely aggressive exposure for clients as well as a website that has been brilliantly set up to make consumers feel like DCRealEstate.com has many more clients than they actually do, driving up inquiries by potential buyers for greater business leads for in-house staff. DCRealEstate.com seems to always be the first mover in the development arena. (at this point you are probably asking yourself ‘whats wrong with them then?) Well heres where it seems like DCRealEstate.com faults…on my two interactions with them on different projects and with different members (one of which was with the broker) I was given a very poor service. Let me explain….on one of their projects, Bascilicalofts.com by Macy Development, I was the selling agent on one of their units. At first everything was wonderful, they did a great job marketing the building and staging a unit. My clients were ecstatic the moment they walked in the model and immediately after our first day showing property, were ready to write an offer. Alright…so far so good. After days of painstaking negotiations with their agent over a measley $2000 we came to terms and ratified. They used a mortgage lender, Leila Search, from First Madison Mortgage, whom I recommended & is a personal favorite of mine. Everything was perfect. Three weeks later we went to settlement and my clients were ecstatic.
A week goes by and my client moves in only to find out that Macy Dev had destroyed a Verizon router box on the property and my client was unable to get service because Verizon claimed that they wouldnt service the entire block until Macy paid for the box and Macy’s claim was that there was no box. To this day I dont have proof either way but what killed me was the agents reaction to the situation…”its not my problem now that we’ve settled, contact the developer.” What happened to commitment to service?!?!?!?!
On another development, the Metropole, a wonderful building caddy-corner to my building with incredible finishes and wonderful craftsmanship, I was working with a client interested in several of their units. Thats right, several! My clients needs are 3000+ sq ft, two car parking, outdoor living space etc. I thought I had found it. The Metropole has three units, 612, 613, and 614, priced between 650k and 750k, that my clients had the interest in combining and turning into one spectacular unit according to their needs. Well one afternoon they had the afternoon off and decide to stop in the sales office to get some information about the building. That afternoon we spoke and to my surprise they told me that DCRealEstate.com didnt seem like they were willing to accomodate any requests of my clients whatsoever regarding information about the three units. So I figured maybe they were asking the wrong questions and decide to go in for myself. Well, they were spot-on. I requested architects plans for the three units and was told I would receive them in a timely bases. A week goes by. Nothing. I call and ask. Another week goes by. I stop by and ask. Nothing. Two more weeks go by and still nothing. I go in and leave a note. SIX weeks after my first approach and my sixth time in the sales office did someone FINALLY go in and get the plans for me. What kills me even more is that my clients may have been willing to do all of the work themselves out of pocket and all we wanted were the plans.
Enough complaining….its not for me!
Urban Land Company.
A great little company with a very niche market stemming from work in the Ledroit Park & Eckington area. An area that my associate Melanie Moses happens to specialize in as well. Well the company is headed by a gentleman by the name Girard who, from my impression, has his company well under wraps and has done quite a job exposing himself to the market. My issue is that it seems to be the Girard show and their commitment towards developers is much less catered than I am hoping to offer my clients allowing them to keep me as hands-on & as hands-off as they need me to be. So where’s the room for the aspiring agent? I dont know if there is any.
Great company, solid reputation, great exposure. A little bit more into the lower priced developments than I would like to be.
Great company, wonderful reputation. I think they may be a little pompous for me though. I havent spoken with them much but my impression is that they are already too big to offer the catered services to their clients & I dont know how influential the agents are at this point to their developers. There seems to be a disconnect between the agents and their broker.
Wonderful company, solid foundation and wonderful reputation. I dont know what else there is to say. They are very well established, work with very high-end clientele but where is the room for growth. They may have maxed out their ability for dynamicity at this point.
YAY!!!! Ken’s reputation is solid, they have a wonderful reputation in the industry and his track record is impeccable. The company, partially directed by Vice President of the company, Tomas Guirola, has started its treck towards stardom. Ken is the brainchild (or should I say brainman) with 25 years experience, he is always available and has a very similar core set of values that I know I bring to the industry. Tomas is aggressive and HUNGRY, just like I am. They have their foot in the door with developers but nobody directing the show. This is where I come in! There seemed to be a position open in the company for developer liason, working on the day-to-day activities with the developers themselves that Tomas had been handling previously. Well, here I am today, and I couldnt be more confident of my choice. Ken and Tomas have been wonderfully supportive and we are already on our way to three new developments including the potential for two-nine million dollar projects in DC and an additional one in Maryland. Its on!